NEW DELHI: Homeowners can now claim tax exemption for two self-occupied properties instead of just one, as per the announcement made by Nirmala Sitharaman, finance minister, in the Union Budget 2025-26.
Now tax payers can claim nil valuation for two self-occupied properties, compared to just one earlier. This move eliminates the tax burden on notional rental income from a second home.
The real estate sector has welcomed this measure as a step towards boosting homeownership and investment, particularly in metro cities and tier 2 and 3 regions. Boman Irani, president, CREDAI National, said, “Allowing benefits for two self-occupied properties without conditions will further boost homeownership. This, combined with the Rs 1 lakh crore Urban Challenge Fund and the Rs 15,000 crore SWAMIH Fund 2, will enable better urban planning and expedite stalled housing projects.”
Ashish Puravankara, managing director, Puravankara, said, “The tax exemption on notional rent for a second self-occupied home is a significant relief, encouraging investment in real estate. Coupled with a higher standard deduction, these measures will drive housing demand, particularly in the affordable and mid-segment categories.”
Industry leaders highlighted the benefits for landlords and investors. Anuj Puri, Chairman, ANAROCK Group, said, “Investors can now claim nil valuation for two self-occupied properties, instead of just one—a positive move for residential real estate investment. The simplified TDS on rent decreases the compliance burden and enhances liquidity for landlords, positively impacting the rental housing market, especially in metro cities.”
Shishir Baijal, chairman & managing director, Knight Frank India, added, “The investor-friendly approach of the government is evident in the removal of the erstwhile tax on deemed rent for two self-occupied properties. This change is expected to drive more real estate investments and provide greater financial flexibility to homeowners.”
